There are many definitions of a value proposition but in the real world it is quite a simple concept outlined in three main questions: Why should customers buy from you? What you offer extra that can help their business? And them as operators how can they meet customer requirements?

Like in most of any other manufacturing industry vending is a combination of product, R&D, market and customer understanding and after sales service response. But this today is basic. Not enough and as everyone claims it is not even original. The point is that vending is a c o m b i n a t i o n o f m a c h i n e manufacturers, product suppliers, vending operators, market needs and service levels. Not easy to really have a value proposition that is integrated.

Today no market is indifferent to price but a value proposition is also related to costs of operation/service and inevitably to carbon foot print. However, vending still offers a 24/7 availability and that should be taken into account. Also vending today can vend even car batteries - things that not long ago were just impossible to be sold in a vending terminal.

So a value proposition really starts with the machine that is the key vending element: does it sell

more? Why? Does it need less service? Prove it. Does it increase profit? How? Why? Does it save energy? Well done. BUT can it vend the products that the market needs? o p e r a t o r s m a k e p r o f i t s o n ? customers are willing to buy?

Whist understanding that there are no universal machines I am quite curious to see very soon a new model: It has cold drinks, hot drinks, soups, fresh milk and a small footprint. Energy saving mode and above all very easy maintenance. These seems a very good start as in one machine you can serve very different products. BUT are these the products the market needs? - for example, is the machine using coffee beans? how is the fresh milk cleaning process? - and many other questions arise.

So assuming that the machine is working adequately we move on to an operator: does he have the capacity to provide fresh milk? soups? beans? syrups? If so, well done. The customer will love the choice available.

In a very short conclusion what I am tying to convey is a message that improved sales in a machine - if at all happens - is not enough. The right

products must be there inside as well as the right service.

The real value proposition is based simply on:

1.mach ine f lex ib i l i t y - fo r example, a cold drink machine: what packs does it vend? today the new drinks (healthier and higher value) usually are in smaller packs or larger packs with all sort of shapes- can it vend any?

2.o w n e r s h i p c o s t s - maintenance/spare parts - it will influence your profitability3.product availability - do you

access the products that make the difference? allow new concepts?4.location - please not in a

cemetery5.target audience - do you see

an airport selling baby nappies? I do.6.benefits of having a machine

in such a location.7.o t h e r s a v i n g s s u c h a s

electricity

8.Finally: innovate in what you offer, do not compete in price. Compete in differentiation instead and give your customers either value for money or the very best at a premium price. Anything else in between is a failure.

VALU

E PR

OPO

SITI

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HOW DO YOU COMPARE?

What is a true value proposition in vending?

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Market Needs

Product fitness

Manuel AlvesBusiness Development DirectorEast West Export UK Ltd